Flying in face of cuts
WITH its sleek shape, Taranis, BAE Systems’ unmanned air vehicle (UAV) due to make its maiden flight next year, could be in a science fiction film. As the stealthy drone develops, work is under way to make sure airspace can deal with the expected proliferation of UAVs, from potential combat aircraft to surveillance and reconnaissance craft.
BAE Systems chief executive Ian King, below, believes unmanned systems are “irresistible technology”. Speaking ahead of the Farnborough International Airshow, he says: “There is a compelling argument to invest in unmanned technologies. I see them as part of a mix with manned platforms. We are investing in systems that will promote autonomy. This will be able send back intelligence, not just data.”
He is also confident the requisite airspace breakthroughs will be made in the UK.
UAVs are just one of several business streams identified by King as potential winners as BAE Systems adapts to the relentless decimation of defence budgets. He says opportunities lie in cyber security, electronic systems and service contracts on existing platforms.
BAE’s cyber security division, Detica, has revenues of £337 million a year and King expects double-digit growth in the division which already has telecoms, banking and insurance firms as clients. “I see an exponential increase in the service,” he says. “It suits anywhere that data needs protecting, and it is tried and tested on BAE Systems networks.”
The potential electronics market includes electronic warfare systems, electro-optical sensors, digital engine and flight controls and next-generation military communications systems.
King is also looking for the “fast lanes” in the US defence budget. He believes the F-35 fighter jet, a $350 billion (£225 billion) programme, the aft fuselage of which will be built in the UK, is here to stay despite its teething troubles.
An upcoming US procurement which may be worth billions is the TX programme for up to 350 advanced trainers for the US air force. BAE has teamed up with US firms L3 and Northrop Grumman to bid. If they win, some highly-skilled jobs will be sustained in the UK supply chain although final assembly will be in the US. The winning bid will be announced in 2014.
Non-UK and non-US orders are up 10 per cent and the international team expects negotiations to start soon with Oman for 12 Eurofighter Typhoons. United Arab Emirates may require up to 60 of the jets.
Back on home soil, Typhoon remains key for BAE Systems in manufacture, support and upgrade of the fleet. Military air engineering capabilities will also be buoyed by high-volume manufacturing of the F-35 and developments in unmanned aircraft.
Defence budgets are in tatters but after identifying future trends early, BAE Systems looks in good shape.